Mike Walden: Will WFH, AI help or harm us?

Published 12:00 am Tuesday, May 9, 2023

By Mike Walden

Most of us are prone to shortening names. Wolfpack becomes “Pack,” Tarheels are “Heels” and the NHL “Hurricanes” are called “Canes.” Shorter names save time and energy in speaking.

The economic world is no different. Recently we’ve been hearing much about “WFH” and “AI.”  WFH stands for “work-from-home,” and AI means “artificial intelligence.” Both will have significant impacts on the labor market. But what are their pros and cons? Let me present some insights and analysis and then let you decide.

Prior to the pandemic, less than 10% of workers worked from home. Due to the shutdowns in the economy caused by COVID, at the height of the pandemic an estimated 60% of workers were engaged in WFH. Then, as the economy re-opened, workers returned to the office, but not at pre-pandemic levels. Today it’s estimated about 30% of the workforce do WFH.

Some researchers think WFH could rise, perhaps leveling out at 40%. Yet the rate could be much higher for some occupations. Some forecasts predict that the WFH rate in computer science, management, design and even law jobs could reach 70%.

Is the phenomenon good or bad? I recently wrote a book (Re-Launch: How Families Can Be Renewed in the Post-Pandemic Economy) that examined WFH from the point of view of workers, families and the environment. With daily trips to work no longer necessary, workers and their families could move to less expensive areas and save money on housing and commuting. With less commuting, pollution related to travel will be curtailed. Also, with living expenses and travel time reduced, parents would have more time to spend with their children.

Businesses using WFH would be able to cut their spending on buildings and related operating expenses. Traffic in metropolitan areas, where many of today’s jobs are located, would become less congested. Additionally, if a significant number of WFH workers move to small towns and rural areas, competition for housing in metro areas would drop, and so too would prices and rents. Certainly, some businesses in metro regions – such as restaurants and retailers – could see their revenues drop, but on the upside the growth of WFH residents in smaller communities could spark economic growth in regions that have not kept up with the metros.

One big question about WFH is its impact on worker productivity. Can workers perform their tasks as well from home without interacting in-person with colleagues and supervisors? Studies of this question have thus far been inconclusive.

I certainly think WFH is here to stay. Whether it is good for any individual worker or business is a question companies and employees will have to answer.

AI has been in development for decades, but recent advancements in computer capabilities have pushed it to the forefront.

The idea of AI is actually simple. As computer power has increased, technology to collect, analyze and develop conclusions from massive amounts of data has become possible.  Projects that would have taken humans weeks, months or even years to accomplish can now be done in minutes or seconds by technology.

AI is really machine learning. As an aid to people, it can have tremendous worth. Consider this example. A patient has a series of symptoms with no obvious diagnosis. The patient’s doctor uses AI to compare patients – potentially from all over the world –with similar symptoms and uses their outcomes to develop a diagnosis. AI will then also compare the results from different treatments of the symptoms. Using this information, the doctor can make a much more informed conclusion of how to help the patient. Without the immediacy of information from AI, it would have taken the doctor much longer to develop a confident treatment.

From this example we see AI can be a big benefit. AI gives us more information in a faster period of time for human decision makers to use. Still, as AI has become bigger and more powerful, three concerns have emerged.

First, if AI is so good at analysis and decision making, will it simply replace humans? There’s already been a study predicting AI will impact 80% of today’s jobs, in some cases making those human jobs irrelevant. Important decisions will have to be made by employers in how far to go in ceding final decisions to a machine, without any human oversight and review.

Second, if AI does replace a large number of humans performing jobs, what will happen to those people? Fortunately, we’ve had plenty of experience over time with this question. For example, when mechanization came to the farm and factory, there were worries unemployment would become permanent for the displaced workers. But it didn’t happen. The economy created different kinds of jobs for workers. We can hope this will be repeated.

Last, the third concern might be the most important: The worry over misuse of AI to create fraud, deceit and deception. At this point, we don’t know how prevalent this concern may be, how to protect us from it.

Keep watch of both WFH and AI as they become more dominant parts of our lives. We’ve seen this story before with earlier forms of technology. Can we maximize the benefits while minimizing the potential disadvantages? You decide.

Mike Walden is a William Neal Reynolds Distinguished Professor Emeritus at North Carolina State University.